Chinese economy can achieve "soft landing": OECD report

Source:Time:

PARIS, June 3 (Xinhua) -- China's economy can achieve a "soft landing," according to Alvaro Pereira, a director at the Economics Department in the Organization for Economic Co-operation and Development (OECD).

"I think China has enough firepower to realize its new normal," the expert said in conversation with Xinhua Wednesday.

The new normal is a concept proposed by the Chinese government referring to a period of more moderate but balanced and durable economic growth.

Pereira's opinion represented OECD's official analysis of China's economy. According to its latest Economic Outlook report published the same day, an "orderly adjustment of the Chinese economy towards a new normal growth rate is underway."

A number of facts have been introduced by OECD's report. Today in China, bank lending has been geared towards more productive uses while investment has been slowing for some years and is now a smaller fraction of GDP than consumption. Meanwhile, tax cuts have been adopted for micro and small firms, etc.

As structural reforms profitable for China's long-term growth advance, the short-term slow down of China's economy is supported by many factors such as easing of monetary policy, the acceleration of infrastructure investment and the effective kick-off of the New Silk Road, the OECD report said.

It added that debt swaps at the sub-national level should help reduce debt-servicing costs and mitigate fiscal risks.

Certainly, China has still a lot of work to do to avoid risks during its transition. "We think it's important to continue reforming state-owned enterprises. It's very important to liberalize infrastructure variables, and it's very important to invest in skills, to invest in agriculture," said Pereira.

However, "the slowdown of China's economy is not a crash," noted the economist, adding that "even though the world pays very close attention to China, there is still a bit of lack of knowledge."